The 24-year-old has moved to Eastlands on a one-season loan deal and replaces Antoine Sibierski who joined Newcastle.
Beasley passed a medical examination at the club on Thursday and agreed to the deal just before the European transfer deadine passed City said on its Web site.
Beasley capped 57 times by the United States appeared for his country at the World Cup in both 2002 and 2006.
He reportedly had been considering a return to MLS to play for Real Salt Lake.
Claudio Reyna the former U.S. captain also plays for Manchester City.
The former Chicago Fire player also helped PSV reach the Champions League semifinals in 2005 leading the Eredivisie two-time champions in goals during their European campaign.
At the 2006 World Cup in Germany Beasley provided the assist to goalscorer Clint Dempsey against Ghana — the only goal scored by the Americans in the competition.